What Moved The Markets This Week π
Home Sales Plunge To 14 Year Low, Threads User Activity Collapsing, Fed Launches FedNow Instant Payments, Meta's New Llama2 AI Model, Ford Cuts F150 EV Prices, and Tesla + Netflix + Amex Earnings
Sunday Morning Markets
Trading Week 29, covering Monday, July 17 through Friday, July 21. Your weekly financial markets update, in less than 5 minutes.
The Week In Review βͺ
Fed launches FedNow instant-payment service
Existing home sales drop to slowest pace in 14 years
Inflation cools in Canada and the United Kingdom
Chinaβs economy struggles to grow and reopen
Ford cuts F-150 Lightning price by $10K
Metaβs Threads user engagement is collapsing
Headlines out of the AI industry:
Meta launches its Llama 2 model
Apple rushing to build its own GPT-like chatbot
Microsoft to charge $30/mo for AI features
Wix launches AI website building tool
Earnings from Tesla, Netflix, and Amex β see breakdowns below
US Markets πΊπΈ
Existing home sales drop to the slowest pace in 14 years as low supply chokes the market. June home sales were 18.9% lower compared with last year, falling to a seasonally adjusted annualized rate of 4.16 million units.
Federal Reserve launches new FedNow payment service allowing for instant transfers between banks and their consumers. So far, 35 early adopters, including JPMorgan Chase and Wells Fargo have signed up.
U.S. retail sales rise just 0.2% in June reflecting a shift in consumer spending habits and signaling softness in some parts of the U.S. economy. The shortfall stemmed mainly from a decline in spending at gas stations.
U.S. Leading Economic Index (LEI) fell again in June, marking the 15th consecutive month of declines. The index is now down 7.82% versus the year prior, a level consistent with previous recessions.
Goldman Sachs cuts probability of a recession in the next year following a slew of positive economic data. They now only believe there is a 20% to 25% chance the U.S. experiences a recession in the next twelve months.
TSMC delays the start of its Arizona chip factory due to a shortage of skilled labor. The company noted theyβre sending trained technicians from Taiwan to train local workers. Apple has plans to use chips built at that plant.
Ford cuts the price of its F-150 Lightning by $10K saying its efforts to boost production and lower costs for battery minerals have paid off. The starting price of the cheapest version of the truck now starts at $50,000.
Rest of World π
Canadaβs inflation falls to a 27-month low of 2.8% in June, led lower by energy prices. However, food and shelter inflation persists despite 10 interest rate hikes in less than 18 months. Analysts were expecting inflation to drop to 3%.
China misses their Q2 GDP growth estimates as the economy struggles to reopen as planned. The economy grew 0.8% in the second quarter, slower than the 2.2% QoQ pace recorded in the first three months of the year.
Inflation in the UK cooled off dramatically in June as the CPI fell to 7.9% (vs 8.2% est.), down from Mayβs reading of 8.7%. CPI seems to have peaked at 11.1% in October. Excluding food & energy, core inflation also fell to 6.9% (vs 7.1% est.)
Russia axes landmark grain deal with Ukraine just hours before the deadline. First signed in July 2022, the U.N.-brokered Black Sea Grain Initiative has been repeatedly extended in short increments.
Netflix starts password crackdown in India and every other global market after its previous limited rollout helped add nearly 6 million new subscribers in Q2. Netflix has struggled to continue its amazing growth seen in β20 and β21.
Tech β‘
Meta opens its AI model to commercial use giving startups and businesses a powerful free alternative to pricey models sold by OpenAI and Google. Their model, called Llama 2, will be distributed using Microsoftβs Azure cloud services.
Metaβs Threads user engagement collapses from the peaks seen just a few weeks ago. Data show user engagement has fallen 70% as executives focus on options such as a chronological feed.
Apple is now rushing to build its own LLM to compete with the likes of OpenAIβs ChatGPT, Googleβs Bard, and Metaβs Llama 2. Appleβs AI team called Ajax is building a chatbot some call βApple GPTβ.
Microsoft to charge $30/month for an AI subscription that integrates intelligent tooling with its Microsoft365 apps. Including the subscription to Copilot, the monthly cost of enterprise plans could increase as much as 83%.
Amazon to launch βpay-by-palmβ technology at all Whole Foods stores by year-end. Amazon One will allow users to enter and pay for items by swiping their hand over a kiosk. The company is marketing the technology to third parties.
Tesla builds its first cyber truck after years of delays. Musk said volume production for the truck will start in 2024. Wall Street expects fewer than 10K deliveries this year, but closer to 100K in 2024.
Earnings Reports π°
See other breakdowns on our Twitter page.
Weekly Poll π³οΈ
Week Ahead π
Monday
US - S&P Services PMI (JUL)πΊπΈ
Europe - S&P Composite PMI (JUL)πͺπΊ
Germany - HCOB Manufacturing PMI (JUL)π©πͺ
Earnings Reports: Dominoes, F5 Networksπ°
Tuesday
US - CB Consumer Confidence (JUL)πΊπΈ
Germany - Ifo Business Climate (JUL)π©πͺ
Earnings Reports: Microsoft, Alphabet, Visa, Louis Vuitton, Texas Instruments, NextEra Energy, Verizon, Raytheon, Unilever, General Electric, General Motors, Spotify, Snap, Teladoc, Jetblueπ°
Wednesday
US - FOMC Interest Rate DecisionπΊπΈ
US - New Home Sales (JUN)πΊπΈ
Earnings Reports: Meta, CocaCola, Boeing, ServiceNow, AT&T, Chipotle, Hilton, eBayπ°
Thursday
US - GDP (Q2)πΊπΈ
US - Durable Goods Orders (JUN)πΊπΈ
US - Pending Home Sales (JUN)πΊπΈ
Europe - ECB Interest Rate Decision πͺπΊ
Earnings Reports: Mastercard, AbbVie, Mcdonalds, T-Mobile, Intel, Volkswagen, Ford, Rokuπ°
Friday
US - PCE Inflation (JUN)πΊπΈ
Germany - CPI Inflation (JUL)π©πͺ
Earnings Reports: Exxon Mobil, Chevron, Proctor & Gamble, Hermes International, AstraZenecaπ°
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